Dow, S&P 500 set record highs in light volume

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The Dow and S&P 500 eked out a fifth session of record closing highs today, barely extending the market's recent rally in light volume as consumer discretionary shares gained.

The S&P 500's top percentage gainer was Zoetis, which jumped 8.9 percent to $43.72. Activist hedge fund manager William Ackman's Pershing Square Capital Holdings has taken a new position in the animal health company, two sources familiar with the matter said today.

The S&P 500 has rallied more than 9 percent from a six-month low in October, buoyed by supportive economic data and solid corporate earnings reports. For the year so far, the index is up 10.4 percent.

The Dow Jones industrial average rose 1.16 points, or 0.01 percent, to 17,614.9, a record high close. The S&P 500 gained 1.42 points, or 0.07 percent, to 2,039.68, also a new record. The Nasdaq Composite added 8.94 points, or 0.19 percent, to 4,660.56.

Volume was light due to the US Veterans Day holiday. About 5.5 billion shares traded on US exchanges, below the 6.8 billion average this month, according to BATS Global Markets.

The S&P 500 set its 40th closing high of the year, versus 45 such highs in 2013. The last time the index closed at a record for five consecutive days was in May 2013.

The S&P 500's biggest percentage decliner was Juniper Networks, down 5.7 percent to $20.28, a day after the company's chief executive resigned following a board review of his conduct in a negotiation with a customer.

NYSE advancing issues outnumbered decliners by 1,566 to 1,481, for a 1.06-to-1 ratio on the upside; on the Nasdaq, 1,407 issues fell and 1,239 advanced for a 1.14-to-1 ratio favouring decliners.

Europe's benchmark index of top shares trimmed its gains, hurt by a fall in Italian stocks and a weak opening on Wall Street, but remained supported by strength in telecoms issues.

The FTSEurofirst 300 index of pan-European shares closed up 0.3 percent at 1,358.78 points, after being up 0.5 percent earlier. US stocks opened slightly lower on the day.

Italy's FTSE MIB traded flat, with a 3.3 percent fall in UniCredit making it the top faller. It rapidly shed gains made after an expectation-beating report.

UniCredit's revenues were hindered by weakness in the Italian economy, which took the shine off stronger than expected profits, traders said.

The FTSE Italia All-Share Banks Index is down over 12 percent since early October.

Meanwhile, Japan's Nikkei share average hit a seven-year high today as speculation swirled that Prime Minister Shinzo Abe may postpone a planned sales tax increase and call a snap election to bolster his political standing.

The Nikkei share average rose 2.1 percent to 17,124.11 points, its highest close since October 2007, with traders citing heavy buying in the Nikkei futures by speculators such as commodity trading advisors (CTAs).

Local media reported on Tuesday that Abe might call a snap election before the end of the year if he decides to delay a planned hike in the sales tax to 10 percent slated for next October. No election for parliament's lower house need be held until 2016. Abe's junior coalition partner said his party should be prepared for a possible early election.

The news surprised financial markets, which have long expected that Abe will go ahead with the second stage of the planned tax increase despite a sharper-than-expected blow to the economy from the first tax hike in April.

A snap election could cement Abe's grip on power because opposition parties are too fragmented to win, despite a decline in Abe's approving ratings.

Japanese shares have jumped after the Bank of Japan surprised investors by unleashing more stimulus on October 31.

The rally today was led by buying in Nikkei futures and options, which led to sharp outperformance of the Nikkei compared to the broader market.

The broader Topix gained 1.1 percent while the new JPX-Nikkei Index 400 rose 1.2 percent, just over a half of 2.1 percent gains in the Nikkei.

Investors snatched up shares with good earning results as the quarterly earning period headed into the final stretch. Citizen Holdings jumped 11.5 percent after it revised up its profit outlook slightly. Sumitomo Metal Mining Co which hiked its full-year net profit forecast, jumped 4.9 percent.